This Advisory Opinion concerns the following issues as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on June 14, 2002, basing its approval solely on the facts and circumstances stated herein.
 

ISSUE 1: May a state university purchase from a company where the sales manager for the company is dating the university’s purchasing agent?

ISSUE 2: May a state university purchase from a company where the sales manager for the company is the university’s purchasing agent’s spouse?

State law restricts the Mississippi Ethics Commission to interpreting and issuing opinions on Sections 25-4-101 through 25-4-119, 1972 Mississippi Code Annotated and Article IV, Section 109, Mississippi Constitution of 1890.  Therefore, this opinion does not address the Mississippi laws outside the Commission’s jurisdiction nor the governmental entity’s internal rules and regulations.

The pertinent conflict of interest laws to be considered here are:

Code Section 25-4-101 states:
 

“The legislature declares that elective and public office and employment is a public trust and any effort to realize personal gain through official conduct, other than as provided by law, or as a natural consequence of the employment or position, is a violation of that trust.  Therefore, public servants shall endeavor to pursue a course of conduct which will not raise suspicion among the public that they are likely to be engaged in acts that are in violation of this trust and which will not reflect unfavorably upon the state and local governments.”

 
Code Section 25-4-103(c), (d), (f)(i)(ii), (g)(v), (h), (k)(i)(ii)(iii)(iv), (l), (o), (p)(i)(ii)(iii) and (q) states:
 

“(c) ‘Business’ means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, holding company,  self-employed individual, joint stock company, receivership, trust or other legal entity or undertaking organized for economic gain, a  nonprofit corporation or other such entity, association or organization receiving public funds.

(d) ‘Business with which he is associated’ means any business of which a public servant or his relative is an officer, director, owner, partner, employee or is a holder of more than ten percent (10%) of the fair market value or from which he or his relative derives more than One Thousand Dollars ($1,000.00) in annual income or over which such public servant or his relative exercises control.

(f) ‘Contract’ means:
 

(i) Any agreement to which the government is a party; or

(ii) Any agreement on behalf of the government which involves the payment of public funds.

(g) ‘Governmental’ means the state and all political entities thereof, both collectively and separately, including but not limited to:
 

(v) Any department, agency, board, commission, institution, instrumentality, or legislative or administrative body of the state, counties or municipalities created by statute, ordinance or executive order including all units that expend public funds.

(h) ‘Governmental entity’ means the state, a county, a municipality or any other separate political subdivision authorized by law to exercise a part of the sovereign power of the state.

(k) ‘Material financial interest’ means a personal and pecuniary interest, direct or indirect, accruing to a public servant or spouse, either individually or in combination with each other.  Notwithstanding the foregoing, the following shall not be deemed to be a material financial interest with respect to a business with which a public servant may be associated:
 

(i)  Ownership of any interest of less than ten percent (10%) in a business where the aggregate annual net income to the public servant therefrom is less than One Thousand Dollars ($1,000.00);

(ii) Ownership of any interest of less than two percent (2%) in a business where the aggregate annual net income to the public servant therefrom is less than Five Thousand Dollars ($5,000.00);

(iii) The income as an employee of a relative if neither the public servant or relative is an officer, director or partner in the business and any ownership interest would not be deemed material pursuant to subparagraph (i) or (ii) herein; or

(iv) The income of the spouse of a public servant when such spouse is a contractor, subcontractor or vendor with the governmental entity that employs the public servant and the public servant exercises no control, direct or indirect, over the contract between the spouse and such governmental entity.

(l) ‘Pecuniary benefit’ means benefit in the form of money, property, commercial interests or anything else the primary significance of which is economic gain.  Expenses associated with social occasions afforded public servants shall not be deemed a pecuniary benefit.

(o) ‘Public funds’ means money belonging to the government.

(p) ‘Public servant’ means:
 

(i) Any elected or appointed official of the government;

(ii) Any officer, director, commissioner, supervisor, chief,  head, agent or employee of the government or any agency thereof, or of any public entity created by or under the laws of the State of Mississippi or created by an agency or governmental entity thereof, any of which is funded by public funds or which expends, authorizes or recommends the use of public funds; or

 
(iii) Any individual who receives a salary, per diem or expenses paid in whole or in part out of funds authorized to be expended by the government.

(q) ‘Relative’ means the spouse, child or parent.”

Code Section 25-4-105(1) and (3)(a) states:
 

“(1) No public servant shall use his official position to obtain pecuniary benefit for himself other than that compensation provided for by law, or to obtain pecuniary benefit for any relative or any business with which he is associated.

(3) No public servant shall:
 

(a) Be a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent, other than in his contract of employment, or have a material financial interest in any business which is a contractor, subcontractor or vendor with the  governmental entity of which he is a member, officer, employee or agent.”

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.
 

I am dating someone working in sales in a city, who does not directly sell to a state university.  However, she has been offered an opportunity to relocate to the another city office that does sell to the university.  She will not be directly involved in selling to the university, but she may have an opportunity to become the Sales Manager within one year of working with the city office.  I understand that according to the Mississippi Code, Section 25-4-105(3)(a), that if there is a financial interest involved, this could be a problem.  But, I have two questions that raise some concerns:

If she becomes the Sales Manager of the city branch while we are dating, but does not receive commissions from sales at the university, will this be construed as a violation of the ethics law?

If we get married and she becomes the Sales Manager of the city branch, but does not receive commissions from sales at the university, will this be construed as a violation of the ethics law?

 
Based solely on the facts and circumstances presented by the requestor, the Commission’s opinion is as follows.

ISSUE 1:  The conflict of interest laws do not prohibit the university purchasing from a company that employs the girlfriend of the university’s purchasing agent.

There are circumstances where the university will be prohibited from purchasing from a business employing a spouse, parent or child of a university employee. However, these circumstances are limited to the spouse, parent or child of the public servant as they are the only kinship included in the definition of  “relative” set forth in Code Section 25-4-103(g), as cited above.
The issue presented by the requestor also must be viewed as it relates to Code Section 25-4-101, set forth above.  This code section sets the tone for the conflict of interest laws as the Legislature’s “Declaration of Public Policy.”  This public policy can be summarized as any circumstance having the potential of creating suspicion among the public and reflecting unfavorably  upon the state or local government should be closely reviewed by public servants with the intent to reduce or eliminate any suspicion on the part of the public which detracts from the public’s trust in state or local government.

Clearly, a university purchasing agent whose girlfriend is the sales manager of a business selling goods to the university has the potential of creating suspicion among the public and reflecting unfavorably upon the university.

Therefore, the individual in his role as university purchasing agent  must be careful to avoid situations which might cause the public concern while dealing with the company that employs his girlfriend.

ISSUE 2:  Code Section 25-4-105(3)(a), cited above, prohibits a business in which the public servant has a material financial interest from being a contractor, subcontractor or vendor with the governmental entity that the public servant serves as a member, officer, employee or agent.

The above cited Code Section 25-4-103(k)(ii) defines a material financial interest as a personal and pecuniary interest, direct or indirect, accruing to a public servant or spouse, either individually or in combination with each other, and the income from the business is five thousand dollars ($5,000.00) or more aggregate annual net income. [Emphasis added to bold text]

 
Notwithstanding the above, Code Section 25-4-103(k)(iv), cited above, provides the only  exception when, as in this instance, the income resulting in the material financial interest is that of the spouse of the public servant.  That exception being when the public servant exercises no control, direct or indirect, over the contract between the spouse [or the spouse’s business] and the governmental entity. [Emphasis added to bold text]

As the university’s purchasing agent, the requestor does have control over purchasing contracts with the university, including those contracts with a business that employs the requestor’s spouse.  Therefore, the exception set forth in Code Section 25-4-103(k)(iv) will not apply in this instance.

Therefore, Code Section 25-4-105(3)(a) will prohibit the university from doing business with a company employing the spouse of its purchasing agent.
 
In addition, Code Section 25-4-105(1), cited above, prohibits a public servant, including a university  employee, from using his or  her official position  to obtain a   pecuniary benefit  for a
business with which he is associated.

The above cited Code Section 25-4-103(d), in part, defines a “Business with which he is associated” as any business of which a public servant or his relative is an ... employee or from which he or his relative derives more than One Thousand Dollars ($1,000.00) in annual income or over which such public servant or his relative exercises control. [Emphasis added to bold text]

Another reason emphasizing why the university could not purchase goods or services from its purchasing agent’s spouse’s employing business is that each time the purchasing agent made a decision on purchasing from the spouse’s employing business, he would be using his official position as the university’s purchasing agent to provide a pecuniary benefit to a business with which he is associated.
 
 
 

Scott Rankin
Executive Director